PSB to call $100m sub debt as strong bid for EM outweighs step-down

04 Jan 2013

Promsvyazbank will call its $100m subordinated 2018s on January 31, according to an investor relations official at the Russian bank, in spite of an imminent coupon step-down. Demand for emerging market debt is so strong that a new issue would be cheaper, although the bank has no urgent need for funding.

The note currently pays a coupon of 12.5% but that coupon would reset to five year US Treasuries plus 11.25% if it was left outstanding past January. Because of the huge crunch in US Treasuries since 2008 when the note was placed, that would equate to a step-down ...

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